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The AAPG/Datapages Combined Publications Database

Houston Geological Society Bulletin


Houston Geological Society Bulletin, Volume 23, No. 9, May 1981. Pages 4-4.

Abstract: Application of Basin Analysis To Exploration-Strategy Evaluation


David A. Jones, Jack H. Kelsey, and Previous HitNealTop A. Buck

Cities Service Company has developed a model to test different exploration strategies available to the company. This tool does not make decisions - it cannot, for example, set goals, suggest strategies, or weigh the compromises resulting from available alternatives. It can show how different strategies affect profitability, reserve additions, production rate, and risk.

Cities' Southwest Region initiated the project, and the first study area was the Permian Basin of West Texas and Southeast New Mexico. Two major subdivisions of the project were: (1) Preparation of an environmental data base to describe the Permian Basin. (The data base includes forecast of future discoveries, estimated costs, etc.) (2) Model development. (The computer model uses a network approach to simulate exploration outcomes, and thereby provides the means to pre-test available strategies.)

Exploration is a business fraught with uncertainty. In dealing with this uncertainty, companies pursue widely different strategies. Is there a "best" strategy? Can a single strategy mix minimize risk and maximize expected return for a company? The answers certainly depend on the company's objectives and available resources and on the exploration environment as well. Analysis of these elements via computer simulation may lead to better response to an uncertain environment.

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